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Recently, Celgene Corporation (CELG - Analyst Report) announced encouraging data from two phase III studies (PALACE-2, PALACE-3), which evaluated its candidate apremilast in patients suffering from psoriatic arthritis at 20 mg and 30 mg dosages. 

The encouraging pipeline-related news had a positive impact on Celgene’s stock price. Psoriatic arthritis refers to a painful, chronic inflammatory disease, associated with psoriasis (a skin-related disorder).

The randomized, placebo-controlled studies are evaluating patients suffering from psoriatic arthritis, who had a history of failed treatment by oral disease-modifying antirheumatic drugs (DMARDs) and/or an anti-tumor necrosis factor (TNF) agent. The patients were treated with apremilast either as a monotherapy or in conjunction with other antirheumatic therapies. We note that positive results from the other phase III study (PALACE-1) of the program were disclosed by Celgene in July 2012.

Results from all three studies revealed that treatment with apremilast resulted in improvements in various measures of physical function through week 24. Furthermore, treatment with the candidate was found to be safe. Celgene stated that the extension phase of the study will remain blinded until all patients have completed week 52. Celgene intends to present complete data from the studies at appropriate medical conferences.

Celgene intends to seek US approval for apremilast in the psoriatic arthritis indication based on data from the PALACE program in the first half of 2013. Celgene is also evaluating apremilast in patients suffering from moderate-to-severe psoriasis.

Celgene intends to seek EU approval for apremilast in the psoriasis and psoriatic arthritis indications in the second half of 2013. Apremilast, on approval, would compete with drugs such as Amgen/Pfizer’s (AMGN - Analyst Report) /(PFE - Analyst Report) Enbrel in the market for inflammatory diseases.

Moreover, Celgene also presented positive data from a phase II study, which evaluated apremilast as a treatment for Behcet's disease. Celgene intends to submit marketing applications for apremilast in Behcet's disease, a rare inflammatory disorder, in multiple nations.

Our Recommendation

We currently have a Neutral recommendation on Celgene. The stock carries a Zacks #3 Rank (Hold rating) in the short-run.

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